Stablecoin Assessment Framework

Available as: PDF

The issuance of stablecoins and other cryptocurrencies continues to increase, highlighting the importance of evaluating the risks these innovations pose to the financial system. However, given the novelty of stablecoin arrangements, questions remain about how authorities should analyze them and what they should be concerned about: How should we classify the different parts of the stablecoin arrangement? How can we quantify the risks in a way that is comparable to other risks to the financial system? And how can we ensure risks are evaluated consistently across stablecoin arrangements?

To address these questions, we propose a three-step framework that authorities can use to assess the risks of a stablecoin arrangement:

  1. classifying the stablecoin arrangement into three parts—coin structure, related transfer system(s) and related financial service(s)—and categorizing the attributes of each part
  2. identifying specific risk scenarios that are relevant to the stablecoin arrangement
  3. quantifying the range of probable loss and possible frequency associated with the identified risk scenarios

Our proposed framework allows authorities to understand the defining characteristics of stablecoin arrangements, to be specific about any concerns they may have, and to be objective in their treatment from issuer to issuer.